Knowledge Base – A LawSikho Initiative

This article has been written to educate you on entering the $400 Billion U.S. legal industry by learning to draft U.S. corporate bylaws for various types of corporations based in the U.S.

Introduction

I remember the first time I heard the word ‘Bylaws’. 

Suits Season 1, Ep 3, titled ‘Inside Track’ — Harvey Spector and Mike Ross desperately needed to stop the interim CEO (Robert Stensland) from relocating McKernon Motors’ manufacturing facility from the US to some overseas country. 

Stakes were high, adrenaline was on peak, where would the solution be found? There is no law barring such actions. 

After, what seemed to be a losing battle, they found a loophole— a clause in the bylaws, which stated that the interim CEO lacked the authority to make such a decision until the board of directors appointed him as a permanent CEO. 

Day saved!

My interest peaked, and I started researching what bylaws are. They seemed to hold a lot of value in how companies functioned. I learned that corporate bylaws are the constitutional documents of corporations that lay down their internal functioning. 

Different jurisdictions have different nomenclatures for them. In India, we have a Memorandum of Association (MoA) and Article of Association (AoA) for our companies. 

Now that we have some basic understanding of what corporate bylaws are, let’s understand some key concepts before I teach you how to draft them. For the purpose of this article, we will focus on US-based corporations. 

Understanding corporate bylaws and its purpose

I’m sure the introduction I shared earlier gave you some idea about corporate bylaws, right? Nevertheless, let me also share a textbook definition to ensure you fully understand. Let’s break down the essential elements:

• It has to be a formal document, so putting it in an email text won’t suffice
• It prescribed the internal rules, regulations, and operating procedures
• It serves as a guide for managing the corporation’s internal activities
• It also lays down the roles, responsibilities, and rights of all parties involved in the governance of a corporation 
• It lays down the procedure for making key decisions, holding meetings, and resolving disputes within the corporation

Why should Indian lawyers learn about U.S. corporate bylaws

Before diving into why understanding U.S. corporate bylaws is essential, let’s acknowledge a reality: Covid 19 has brought significant changes in how we work now. I am not sure if you would agree with me on this. But remote working is now an acceptable form of working. We are seeing a high demand for international remote workers who can offer high-quality corporate law and paralegal services to clients based in the US.  

 If you aspire to go international through remote opportunities, understanding U.S. corporate bylaws is as essential as the heart is to the body.

If you have read the article carefully this far, you would already know that corporate bylaws establish the internal rules governing how a corporation operates, right? So, understanding U.S. corporate bylaws not only opens the door for you to start working with U.S.-based corporations but also boosts the much-needed confidence required to deal with clients. 

Once you understand in and out of U.S. Corporate Bylaws, you will know how to assist clients in running a U.S.-based corporation by guiding them through various internal and external conflicts.  

Therefore, in this article, I am going to teach you how to draft corporate bylaws for a Delaware-based corporation. I am picking the State of Delaware because of its business-friendly laws which makes it a preferred jurisdiction for corporations in the U.S. You would be surprised to know that most of the big tech corporations like Google, Amazon, Meta, Tesla, and Netflix are all incorporated in the State of Delaware.

For your reference, corporations based in Delaware are governed by Delaware General Corporation Law (DGCL).

A glance at the key components of corporate bylaws

Before I teach you how to draft bylaws, it’s important to discuss their key components. Understanding these will make the drafting process easier. 

Having said that, you should know that every corporate bylaw is different as they are prepared considering the nature and size of a corporation. But, the good news is that key components of every bylaw remain similar. The key components of bylaws are as under:

1. Corporate structure: This outlines the hierarchy among top, middle, and lower-level management of a corporation. Along with the hierarchy, the relationship between directors and officers at the top and middle management is codified and segregated based on the roles and responsibilities they play in the corporation.
2. Meeting procedures: Every corporate bylaw has clauses related to meetings of the board and shareholders. The bylaws streamline the procedure for conducting meetings so that everybody knows the procedure and there is less confusion.
3. Voting rights:  Major corporate decisions are made during board meetings. Bylaws detail the voting process and the voting rights of shareholders and directors. 
4. Conflict resolution: In case there arises some sort of conflict among the board of directors or management, the same can be resolved through the mechanisms provided under this clause.
5. Amendments: This one is very common, it specifies how the bylaws can be updated to reflect changing circumstances.

I think knowledge of these components will give you a broad overview of what needs to be included in corporate bylaws.

Anyways, the time is right to start teaching you how to draft corporate bylaws. But before I begin, I would like to remind you that nothing good in life comes easy. Having said that, this article is going to be a long one. So, we suggest you sit with a cup of coffee or green tea (whichever is your comfy drink) and take 2 to 3 minutes of pause after reading a clause or two. 

Step by Step guide on how to draft Corporate bylaws for a Corporation in the USA

There are eight primary or most important clauses that every corporate bylaw must have and they are:

1. Registered Office
2. Meeting of Stockholders
3. Directors and their Management
4. Meeting of Directors 
5. Officers and Agents
6. Certificates and transfer of shares
7. Amendment to Bye-Laws and Construction
8. Miscellaneous

I’ll explain each clause mentioned above, with a sample draft and comments to help you understand the reasoning behind its inclusion.

Registered Office

Explanation: This clause is about the corporation’s official address. In my experience, I haven’t seen any registered corporation or a company in the world with no physical address. The law is clear. Every registered corporation must have at least one physical office address. It’s the go-to address for all business, legal, and administrative correspondence. 

Sample Clause: 

The registered office of the CX Corp shall be located at 123 Corporate Way, Wilmington, DE 19801. The Corporation may change its registered office to any other location within the state or outside the state as determined by the Board of Directors. The Corporation may open branch offices in and outside the state as may be considered necessary by the board of directors to keep up with the growth of the business.  

Comments:  Confirm with your client if they plan to expand in the future. If so, empower the board to change the registered address. Also, confirm with your client if they plan to open branch offices in other states to meet business needs. If say yes, then include a clause that allows corporations to open branch offices in and outside the state.  

Stockholders Meeting, Notice and Quorum 

Explanation: Stockholders, the owners of the corporations, meet once a year to discuss the performance of the corporation in an annual meeting. Refer to Title 8, § 211 of DGCL to read the law on Stockholder Meetings, Elections, Voting, and Notice before drafting this clause in the bylaws.  

Sample Clause:

Annual Meetings: The Corporation shall hold an annual meeting of stockholders at such time and place, either within or outside the State of Delaware, as determined by the Board of Directors to discuss important business decisions that have a direct bearing on the stockholder’s wealth in accordance with the procedures prescribed under Delaware General Corporations Law. 

Comments: Under DGCL,  a corporation must hold an annual meeting for the election of the board of directors on a date and at a time outlined in the corporation’s bylaws or as may be decided by the directors. It should be made a mandatory requirement.

Special Meetings: Special meetings of the stockholders may be called by the President, the Board of Directors, or stockholders holding not less than 10% of the voting shares of the Corporation.

Comments: Tell me what would happen in a case wherein a director siphoned off $1 million from the corporation and ran away. Matters like these are urgent and require the calling of special meetings. Therefore, include a clause for special meetings to be called by either the board of directors or stockholders having a significant holding in the corporation. 

Notice of Meetings: The person authorized by the Board shall send the written notice containing details i.e., the place, date, and time of any meeting of stockholders. The Notice shall be delivered to all stockholders who are entitled to vote and whose name is on the register of stockholders, not less than 10 days nor more than 60 days before the date of the meeting.

Comments: Comments: It is quite obvious that every stockholder should know about the place and time of the annual meeting in advance. Stockholders should receive sufficient notice to plan their attendance. Specify a minimum notice period to prevent scheduling conflicts.

Quorum: The presence of stockholders whether in person or by proxy, holding a majority of the voting shares shall constitute a quorum for the transaction of business.  

Comments: What is the point of calling a meeting if enough stockholders do not attend? Make sure that enough stockholders are at the meeting to make important decisions (often called Quorum). If enough people do not show up, the meeting can’t happen and must be adjourned to some other. 

Directors and their Management

Explanation:: This clause outlines the role, powers, responsibilities, appointment, vacancy, and removal of the directors and top management. It is important to define these aspects relating to directors to maintain efficient governance of the corporation.

Sample Clause: 

Number of Directors: The Corporation shall have a Board of Directors consisting of at least 1 and not more than 3 members, as determined by the stockholders or by resolution of the Board. 

Comments: Although there is no limit on the number of directors a board can have. It is advisable you speak to your client and ask how many people they would want to be on the board of directors. Accordingly, you can set a number. For a startup, it is good to have a maximum of 3 people as directors. 

A large organization with diverse operations may opt for a larger board (e.g., 15 directors) to include varied expertise and representation.

Powers: The Board of Directors shall have the power to manage the business and affairs of the Corporation. The power shall include and is not limited to the approval of budgets, significant financial transactions, and the appointment of officers inter alia.

Comments: Pay attention while drafting this clause. I would advise you to keep the bylaws broad and flexible, as smaller and specific details regarding powers can be stipulated in the individual agreements with the directors.

Appointment: Directors shall be elected at the annual meeting of stockholders and shall serve until the next annual meeting or until their successors are duly elected and qualified.  

Comments: Just so you know, it is the stockholders who are the owners of a corporation. Therefore, ensure that the right to appoint directors is granted to the shareholders. The shareholders meet in AGM so the appointment of directors must take place in AGM.

Vacancies: Any vacancy on the Board of Directors may be filled by a majority vote of the remaining directors or by a sole remaining director. 

Comments: It is very common for directors to resign for XYZ reasons. So you should add a clause allowing the remaining majority directors to fill in the position. If you wish or as the client demands, you can put a process in the bylaws to be followed for the appointment of directors.

Removal: A director may be removed, with or without cause, by a majority vote of the stockholders entitled to vote at an election of directors.

Comments: As mentioned before, since stockholders are the owners, they should retain the power to remove underperforming directors. 

If you feel tired, take a break of 2 minutes before reading further!

Meeting of Directors 

I am sure that you know a corporation acts through its board of directors. The Board in turn acts for the corporation by making decisions in a meeting called a board meeting. 

These meetings are crucial for managing the company, as the directors are responsible for setting strategic direction, approving budgets, making major financial decisions, and overseeing management. 

Sample Clause:

Regular Meetings: The Board of Directors shall hold regular meetings at such time and place, either virtually or at the registered office as may be determined by the Board in advance. The requirement of sending a written notice to the board of directors shall be relaxed in case the time and place of the regular meetings are fixed by a board resolution.  

Comments: For taking business decisions that are routine in nature, add a clause for regular board meetings and wave off the requirement of sending written notice.

Special Meetings: On instructions of the President, the Secretary, or any two directors, special meetings of the Board of Directors may be called. Notice of such meetings shall be given at least 7 days before the meeting by mail, email, or other electronic means.  

Comments: Just like a special meeting for stockholders. Do not forget to add a clause for special meetings for board members. The bylaws should cover situations that may need the board’s urgent attention.

Quorum: A majority of the total number of directors shall constitute a quorum for the transaction of business. If a quorum is not present, the directors present may adjourn the meeting without further notice until a quorum is achieved. 

Comments: Similar to stockholders’ meetings, board meetings require a quorum to proceed. Discuss the specific quorum requirement with your client. 

Voting: Each director shall have one vote. The act of a majority of the directors present at a meeting at which a quorum is present shall be the act of the Board of Directors.  

Comments: These are standard voting procedures i.e., the “one director one vote” ensures equal participation. If most of the directors agree their decision becomes the decision of the corporation. Think of it as having a vote in your class where the majority rules.

Participation by Remote Means: Directors may participate in meetings using conference calls or other electronic communication methods, provided that all participating directors can hear each other simultaneously. Such participation shall constitute a presence at the meeting.  

Comments: When directors can’t be physically present in a meeting they should be permitted to attend board meetings virtually. Make sure to have a clause in the bylaws for participation by directors in a meeting virtually and that such participation shall be considered a valid presence in the meeting.

Minutes: Minutes of all meetings shall be recorded and maintained by the Secretary or another designated officer. These minutes shall be available for inspection by any director.  

Comments: Minutes are like notes you take in your class. For corporations, it is important to note down what decisions are taken in the meeting so that everyone remembers what was decided. Assign authority to a Secretary to record and maintain the minutes of all meetings. 

Officers and Agents

I suggest including a clause that defines roles, responsibilities, and appointment processes for officers and agents in the corporation. The DGCL makes it flexible for the corporations to decide whether they want to have this clause or not. 

However, it is good practice in the US to define the roles, responsibilities, and appointment process of officers like the President, Secretary, and Treasurer in the bylaws for operational efficiency.  

When this clause is inserted in the bylaws, you make sure that the board of directors can focus on business strategies and growth while the officers can take care of routine operations.

Also, some U.S. laws require certain officer roles, like the Secretary, to maintain corporate records. So, this clause is not just about structure but about keeping the corporation on track with statutory obligations.

Sample Draft:

Appointment: The power/authority to appoint the officers of the Corporation, which shall include a President, a Secretary, and a Treasurer Board of Directors shall be with the board of directors. The Board, as per its discretion, may also appoint one or more Vice Presidents and such other officers or agents as it may deem fit.  

Term of Office: The Board of Directors shall have the discretion to decide the term of an officer or agent. The Board may, by majority vote, remove the officer or agent at any time, with or without cause.

Duties of Officers:  

1. President: The President shall be the chief executive officer of the Corporation and shall have general supervision over the business and affairs of the corporation, subject to the direction of the Board.  
2. Secretary: The Secretary shall be responsible for keeping the minutes of all meetings, maintaining corporate records, and ensuring that notices are issued as required by law or the bylaws.  
3. Treasurer: The Treasurer’s duties shall be limited to overseeing the financial affairs of the Corporation. This shall include maintaining accounts, preparing financial reports, and ensuring tax compliance with the state or federal agencies, as the case may be.

Authority of Agents: The actions and duties of Agents appointed by the Board or officers shall be as per the direction of the Board or the officer designating them. They shall have such authority as may be specified at the time of their appointment in the corporation.  

Compensation: The compensation of officers and agents shall be determined by the Board of Directors. The compensation shall include salaries, bonuses, incentives, or other forms of remuneration. Any increase in compensation shall be based on the performance of such agents or officers.  

Vacancies: Any vacancy caused due to termination, voluntary resignation, or retirement of any officer or agent shall be filled by the Board of Directors at any regular or special meeting. No position in the corporation shall remain vacant for more than 30 days.  

Comments: The officers and agents, such as the President, Secretary, and Treasurer, work directly under the control and supervision of the board of directors. Therefore, it is essential to include a clause that grants the board of directors full authority over the appointment, term, duties, compensation, and vacancies of these officers. 

Again, take my advice on this and keep the clause regarding these aspects broad and flexible, as the specific terms of employment for these officers can be detailed in their individual employment agreements with the corporation. 

Certificates and Transfer of Stocks

Stocks are what we call in India as shares. They are like tickets that make you a part-owner of the company. If you own more tickets or stocks, you own a bigger part of the corporation and might get more profits or have more votes on corporation decisions.

The bylaws must clearly state the procedure for the issuance, ownership, and transfer of stocks. Without a clear procedure, there will be unnecessary disputes and chaos within the corporation. This clause would bring in much-needed transparency for managing share ownership and transfer.

Sample Draft: 

Shares Certificates:  

1. Each stockholder shall be entitled to a certificate or certificates representing the shares of the Corporation owned by them.  
2. Certificates shall be signed by the President or Vice President and by the Secretary or an Assistant Secretary and shall bear the corporate seal.  

Comments: Do not forget to specify who is going to be the signing authority for the share certificate along with the use of the corporate seal. This will reduce the risk of fake or duplicate certificates.

Lost, Stolen, or Destroyed Certificates:  The Corporation may issue a replacement certificate upon receiving proof of the loss, theft, or destruction and, if required, a bond indemnifying the Corporation against any loss.

Comments:  It is very common for stockholders to misplace shares. Sometimes these certificates get lost or damaged as well. The Lost, Stolen, or Destroyed Certificates clause puts up a procedure for replacing these certificates. This also protects the corporation from potential liability arising from lost, stolen, or destroyed share certificates by making the process for proper verification and indemnity bonds.

Transfer of Shares:  

1. Shares of the Corporation shall be transferable on the books of the Corporation by the holder of record, or by their attorney-in-fact, upon the surrender of the share certificate properly endorsed for transfer.  
2. The Corporation may refuse to transfer shares until the conditions specified in these bylaws or any applicable shareholder agreement are satisfied.

Comments: Speak with the client if they want to keep the shares freely transferable or want to put certain restrictions. I am assuming the shares to be freely transferable and thus the above two clauses suffice. 

Record of Transfers: The Corporation shall maintain a complete record of all share transfers, which shall be available for inspection by any shareholder of record, subject to reasonable conditions imposed by the Board of Directors.

Comments: If you do not have this clause in the bylaws, you are inviting disputes regarding ownership of shares. Which is going to have a direct bearing on the operations of the corporation. It is rational business acumen to have a register of share ownership and a record of all share transfers. 

Restrictions on Transfer:  

1. The Corporation may impose restrictions on the transfer of shares, as permitted by state law, provided such restrictions are noted on the share certificate or disclosed to the shareholder in writing.  
2. Transfers violating any shareholder agreement or restriction duly adopted by the Board of Directors shall be voidable at the Corporation’s discretion.

Comments: Consult your client to confirm if they want to put restrictions on shareholders to sell their stocks to competitors. It is important to establish clear rules on who can buy or sell shares. You can keep the clause broad and wide. However, you can suggest the board of directors put specific restrictions on shareholders’ agreement, later on. 

No Certificates Option: At the discretion of the Board of Directors, the Corporation may issue shares without certificates, provided that the shareholder is furnished with a written statement of ownership details, including the number and class of shares held.  

Comments: You can include a ‘no certificate option’ to keep and maintain the share certificates in digital form. 

Amendment 

Corporate bylaws must adapt to changing laws, market conditions, and internal policies. Any change in law may call for amending the bylaws to be on the right side of the law. This clause lays down the procedure and restrictions for changing the bylaws and addressing ambiguities. 

Power to Amend:  

1. The bylaws may be altered, amended, or repealed, and new bylaws may be adopted by the Board of Directors, subject to any limitations imposed by the Certificate of Incorporation or applicable law.  
2. Any amendment that alters the rights and/or obligations of stockholders shall require their approval in an annual or special meeting.  

Comment:  You may include the Authority to Amend clause to empower the Board of Directors and, where necessary, the shareholders to amend the bylaws. The ability to amend bylaws ensured the corporation remained compliant and adaptable to changes. 

Process of Amendment:  

1. Amendments to these bylaws shall require the affirmative vote of a majority of the directors or shareholders entitled to vote, as applicable.  
2. If the amendment pertains to a matter that affects shareholder rights or privileges, it must receive a supermajority vote as specified by the Articles of Incorporation or state law.  

Comments: Because the changes to the bylaws can significantly impact the corporation and its stakeholders. You should always keep the threshold for changing the bylaws very high. By keeping approval thresholds high, you will be able to protect shareholder rights and prevent hasty or unilateral decisions. For example, requiring a supermajority vote for amendments affecting shareholder privileges ensures broader consensus on critical issues.

   Effective Date: 

Amendments shall become effective immediately upon their adoption unless otherwise specified in the resolution approving the amendment.  

Comments: Do not forget to insert a clause relating to the effective date to avoid confusion on the applicability of the amendment. 

Construction of Bylaws:  

1. In case of any ambiguity or conflict in the interpretation of these bylaws, the Board of Directors shall have the authority to interpret their provisions, and such interpretation shall be binding.  
2. These bylaws shall be construed in accordance with the laws of the State of Delaware.  

Comments: You should know that the ambiguities in bylaws can lead to disputes. When you put an interpretation clause in the bylaws, it gives clarity to the Board of Directors on how the bylaws will be interpreted. Additionally, specifying Delaware law as the governing standard brings predictability in terms of how bylaws will be interpreted.

Severability: If any provision of these bylaws is found to be invalid or unenforceable by a court of competent jurisdiction, the remaining provisions shall remain in full force and effect.  

Comments: It is a very common clause to protect a legal document from being called void in entirety because of one clause or two. You should include protecting the actions of the board of directors in case a specific clause is found invalid or unenforceable, This will help your client avoid the risk of undermining the entire bylaws because of one flawed clause.

Miscellaneous Provisions

Like every legal document, you may add an ancillary clause that covers miscellaneous issues that might not fit neatly into other clauses. Miscellaneous clauses can be used to specifically tailor various clauses to match the unique needs of your client. This will ensure that the bylaws are thorough, complete, and ready to address any situation that may arise.

 Here is the draft of the sample miscellaneous clause:

Indemnification of Officers, Directors, and Agents: The Corporation shall indemnify any officer, director, or agent who becomes a party to any proceeding by reason of serving the Corporation, to the fullest extent permitted by law. Such indemnification may include reimbursement for legal expenses, judgments, fines, or penalties incurred in connection with their service.  

Comments: What generally happens is that whenever a corporation makes mistakes or if there are legal non-compliances, it is the officer responsible for compliance and aware of the issue is held liable. 

Therefore, consult with your client to check if they want to indemnify officers for actions undertaken on behalf of the corporation. It is a good practice to indemnify officers for bona fide actions performed in the corporation’s interest. This provides officers with the necessary support and assurance.

Governing Law: These bylaws shall be governed by, and construed in accordance with, the laws of the State of Delaware.  

Comments: Specifying the governing law provides clarity and ensures uniform interpretation. I chose Delaware because it is preferred for its business-friendly statutes and predictable corporate law precedents.

Corporate Seal: The Corporation shall have a corporate seal which shall be adopted and may be altered by the Board of Directors.

Comments:  A clause on the corporate seal helps prevent unauthorized use or tampering. 

Notices: All notices required by the Articles of Incorporation, these bylaws, or applicable law shall be in writing and delivered personally, by mail, or electronically, to the person entitled to such notice.  

Comments: I don’t think the importance of this clause needs any explanation. However, you must make sure that the rules for sending notices are clear and that stakeholders are properly informed of important annual meetings or special meetings through notices. You should not forget to include electronic methods for sending notices to stockholders.

Waiver of Notice: Any requirement of notice under the Articles of Incorporation or these bylaws may be waived in writing by any person entitled to such notice.  

Comments: You can speak with your client to check if they want the flexibility to waive sending formal written notices to stakeholders. Just so you know, some stakeholders may prefer waiver of formal written notice to expedite the decision-making without compromising consent.

Dividends: Subject to applicable law, dividends may be declared and paid by the Board of Directors at its discretion. The declaration and payment of dividends shall not create a financial obligation for the Corporation.  

Comments: You can also adopt a separate dividend policy or have a clause regarding the dividend in the bylaws itself. You can speak about it with the client and seek his preference.

Confidentiality: All confidential information of the Corporation shall remain confidential and may only be disclosed in accordance with applicable laws or with proper authorization.  

Comments: I insist that you should put the confidentiality clause in the bylaws so that all the employees of the corporation are bound by confidentiality. 

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Final Thoughts

Here is how the final draft of corporate bylaws looks in a structured format.

With this, you should be able to draft effective corporate bylaws for a Delaware-based corporation, which is in compliance with the provision of Delaware General Corporation Law.

When I first encountered the corporate bylaws template, it felt almost similar to the Memorandum of Association (MoA) and Articles of Association (AoA) we use in India, except for certain terms.  If you have some experience in drafting governance documents like the MoA and AoA or have theoretical knowledge about it, you’ll find it relatively easy to draft U.S  U.S. corporate bylaws. 

Once you’re confident in your ability to draft these bylaws, explore freelance. I suggest that once you get a good grip on the corporate bylaws you should start exploring freelance opportunities on platforms like LinkedIn, Upwork, or Fiverr.  You will find a lot of opportunities to work for U.S. clients looking for remote lawyers who can offer corporate law and paralegal services.

Ten years from now, the lawyers who hesitated to embrace international remote work may envy those who did. Don’t let that be you. The opportunity is here, right now. Take the first step toward becoming an international remote worker and build the freedom-filled career and lifestyle you’ve always dreamed of.

Frequently Asked Questions (FAQs)

1. What opportunities exist for me in the U.S. legal market?

The opportunities for Indian lawyers in the US are huge and rewarding. The U.S. legal market is valued at $400 billion as compared to India’s $2 billion market. It is a fact that a growing number of U.S. companies are hiring remote Indian lawyers due to their ability to deliver high-quality services at lower costs. For lawyers, this trend presents a chance to escape traditional jobs with long hours and toxic environments and replace them with remote, flexible work. Additionally, the financial benefits are too good to be true. Indian lawyers can earn up to 3x to 5x more while working for U.S. clients. 

2. How do bylaws differ from articles of incorporation?

Bylaws govern the internal operations of a corporation, while Articles of Incorporation are public documents filed to legally establish the corporation. It contains basic details. Such as the name of the corporation, its purpose, its registered agent, and the name of the initial directors. Whereas, corporate bylaws are internal documents that govern the company’s day-to-day operations as you may already see from the article. 

3. Why should I learn about US federal and state laws?

Understanding U.S. federal and state laws allows you to offer comprehensive legal services behind clerical work. Since corporations are governed by state-specific laws in the U.S., knowing these distinctions is essential for providing effective advice to clients and expanding your expertise. 

4. What role does Model Business Corporation Act (MBCA) play in drafting bylaws?

The  MBCA serves as a foundational template that could be used by different states to enact their corporate law statutes. MBCA, drafted by the American Bar Association, provides a modern and consistent framework for the incorporation, operation, and governance of corporations that can be adopted by different states to bring uniformity. Once you have a good understanding of MBCA, you will be in a position to navigate and advise clients in states that have adopted its provisions. 

5. How can I understand jurisdiction-specific requirements for corporate bylaws?

Start with Delaware, as it’s the most popular jurisdiction for incorporation in the U.S. Once familiar with Delaware’s requirements, gradually explore others, such as Wyoming or New York. Focusing on one state at a time allows you to build a comprehensive understanding of jurisdiction-specific requirements. 

6. How can I navigate US legal terminology and corporate practices?

 If you’re familiar with Indian corporate terminology, U.S. legal terms will be relatively easy to learn. Begin by reading key statutes like the Delaware General Corporation Law (DGCL) or the Model Business Corporation Act (MCBA). Leverage online legal resources, attend webinars, and collaborate with U.S. law firms to gain hands-on experience. 

7. How can Indian business contexts be integrated into US bylaw drafting?

If you have experience in drafting or preparing or at the very least, have the theoretical knowledge of MoA and AoA, then you are already 90% there to draft corporate bylaws for U.S. companies. Both MoA and AoA define a company’s purpose, governance, and operational rules, much like how bylaws function in the U.S.

The skills that you use in India to define the roles of directors, shareholder rights, and decision-making processes can be directly applied to structure U.S. bylaws. The main problem would lie in understanding state-specific corporate laws, which could be solved with 10 to 15 hours of research and study. 

The good part is that the core principles or to say the fundamental principles of corporate structure, including how a company is governed, remain consistent across both legal systems.

8. How do I learn to conduct a preliminary review of corporate bylaws?

I would say that the core principle of conducting a preliminary review of corporate bylaws is more or less similar to how you would review a legal document such as a contract, company policy, or an agreement.  Begin by quickly scanning the bylaws to ensure they comply with applicable laws and governance standards. Focus on essential areas, such as meeting procedures, voting rights, and director responsibilities. Identify any inconsistencies, outdated provisions, or missing clauses, and make recommendations for improvement. 

9. How can I tailor corporate bylaws to specific business needs?

For tailoring corporate bylaws to specific business needs, you must have an open conversation with the client and understand the nature of their business. Try to understand the corporation’s unique characteristics such as its industry, size, and goals. Thereafter, draft bylaws that reflect those factors. For example, a tech startup may need fewer directors for quick decision-making, while a large corporation might need 10 directors with diverse experience to handle the operations. Understand these nuances from clients do a little bit of research and then create business-specific corporate bylaws.

10. What are common pitfalls that I can avoid when drafting corporate bylaws?Relying on generic templates: Always customize bylaws to the company’s specific needs. 

Overlooking state laws: Do not neglect or overlook state laws as each state has its own set of corporate laws. If you fail to align the bylaws with these laws, then it can result in unenforceable provisions. 

Using ambiguous language: Do not use ambiguous or overly complex language because if you do so then you are inviting disputes and misinterpretations. Always use clear, concise, and simple language while drafting bylaws.

Omitting critical provisions:  Address scenarios such as director vacancies, shareholder disputes, or emergency decision-making to ensure the corporation is prepared for contingencies. 

11. What are the best practices that I can use to address conflicts of interest in corporate bylaws?

• Define what constitutes a conflict of interest.
• Require directors and officers to disclose as soon as they arise.
• Establish procedures, such as recusal from voting, for handling conflicts. 
• Include consequences for failing to disclose conflicts to maintain transparency and accountability. 

12. How can I check that corporate bylaws maintain transparency in governance?

Define clear rules for decision-making processes, such as meeting procedures, voting rights, and roles of officers and directors. Include provisions for regular reporting on the corporation’s financial status and other key matters to keep stakeholders informed. Transparency prevents hidden agendas and promotes accountability. 

13. What AI tools can assist me with legal drafting?

If you are new to using AI, then you may start by using free AI tools like ChatGPT, Claude.AI, Gemini, or Google Docs with AI Add-ons. At first, you might find these tools producing incorrect results. However, with continuous use, these tools will start to assist you in proofreading, sentence formation, and even drafting clauses and refining legal documents. More experienced users can try using the paid version of ChatGPT or Claude.AI to access advanced capabilities. 

14. Which online legal platforms are best for cross-border collaboration?

The best cross-border online collaboration platforms these days are LinkedIn, Fiverr, and Upwork. These mainstream platforms are widely popular for connecting with clients or professionals across borders. Once you browse them you will find many U.S.-based businesses regularly posting legal projects such as incorporating corporations in Delaware, drafting corporate bylaws, co-founder agreements, and shareholders agreements among many similar projects on these platforms.

15. How can Indian lawyers build expertise in US corporate governance?

Just as law/CA/CS students prepare for their exams. Similarly, lawyers can build expertise in U.S. corporate governance by learning key statutes like Delaware General Corporation Law (DGCL), Wyoming’s Business Corporation Act, New York’s Business Corporation Law, the Sarbanes-Oxley Act, and the Model Business Corporation Act (MBCA). You can also engage in online courses, webinars, and case studies tailored to U.S. corporate laws that provide practical insights. 

16. What are effective strategies that I can use to network and partner with US law firms?

The best way to network with US law firms or their lawyers is by posting content that is relatable to them. This way you can capture their attention which will give you much-needed visibility in the industry. With time, the algorithm will start rewarding you in ways you can never imagine. 

You can also try reaching out to US lawyers by sending a DM. In your DM offer non-legal support work like writing blogs or articles to start with. This will help you win their trust and open doors for core legal work. 

17. What certification and licensing are required for Indian lawyers to work on US legal matters?

You do not need any certification or license to work as a paralegal or to offer corporate law services to U.S.-based clients.

18. How can I navigate the differences between US and Indian legal systems?

The entire legal resources to learn the difference between the U.S. and Indian legal systems are now just a click away. You can navigate the differences between the two systems by leveraging the wealth of online resources available today. With articles, expert videos, and webinars, it’s easier than ever to gain insights into the U.S. legal framework. These tools can help you quickly grasp the nuances of U.S. laws. By staying informed and using accessible learning platforms, you can break jurisdictional barriers and adapt to the evolving legal landscape.

19. What are the best ways to manage cross-border client expectations?

Managing cross-border client expectations, especially with U.S. clients, can be a rewarding experience. U.S. clients tend to be more patient and understanding, valuing clear communication and respecting professional boundaries. They appreciate reasonable timelines and focus on outcomes rather than micromanaging the process. Their structured approach and willingness to pay fair rates foster a collaborative and efficient working relationship. By setting clear expectations from the start and maintaining regular updates, you can build trust and ensure a smooth, satisfying partnership.

20. How can I stay updated on evolving U.S. corporate laws?

There are many ways to stay updated with the US law. Some of them are: –

• connect with lawyers or influencers on LinkedIn YouTube or Instagram who regularly post content about the latest developments in the US legal industry. 
• Follow trusted legal websites such as Lexology or the American Bar Association (ABA) for timely insights on new regulations and case law. 
• Subscribing to newsletters published by leading U.S. law firms is another way to stay updated on legal changes. 
• Engage with online communities, attend webinars, and connect with U.S.-based corporate lawyers on platforms like Reddit to exchange knowledge. 
• Social media platforms like Twitter and Facebook along with blogs and podcasts, are great resources for you to keep yourself updated in the ever-changing landscape of U.S. corporate law.

21. What is the difference between US corporate laws and Indian company law?

There is not much difference when it comes to substantive or fundamental provisions of law. The difference only lies in the procedural aspect. The key difference between U.S. corporate laws and Indian company law is that U.S. corporations are governed by state-specific laws. This means that each state imposes its own corporate laws on corporations registered under it. Whereas, the Companies Act, 2013 provides a uniform regulatory framework that applies uniformly to all companies across all India.

22. Can I draft or review US corporate bylaws without US bar certification?

Yes, you can draft or review US corporate bylaws without a U.S. bar certification or a license. 

23. What are the key challenges I will face in understanding US corporate laws?

• State-based system: Each U.S. state has its corporate laws, unlike India’s uniform framework. 
• Legal terminology: Terms such as “Articles of Incorporation”, and “Stockholders” may initially be confusing. 

These challenges can be easily overcome if you invest time in understanding U.S. corporate law through research, training, or even by collaborating with U.S.-based legal professionals.